Under the terms of the deal, AIG Financial Products and Global Infrastructure Partners, a joint venture between Credit Suisse and GE Infrastructure, each acquired a 50pc equity stake in Desmond's company, Airport Management and Investment Ltd, which owns and operates the London airport.

A spokesman for the consortium refused to comment on the specifics of the deal and would neither confirm nor deny the press reports in yesterday's newspapers speculating on the value of the deal.

The acquisition of London City Airport marks the first deal by Global Infrastructure Partners (GIP), which makes up half of the American consortium behind the deal.

The investment partnership between Credit Suisse and GE Infrastructure was established earlier this year, with both companies contributing an initial sum of $500m, according to a spokesman.

Desmond purchased the airport, which is located in the docklands area of East London, in 1995 for £23.5m.

He appointed investment house Morgan Stanley earlier this year to sell it on his behalf.

The airport, which is serviced by 15 airlines on 25 routes, is expected to handle 2.4m passengers this year.

This represents an increase of 20pc on passenger numbers in the previous year.

The deal is expected to close in November, pending EU merger clearance.